Radical Organizational Learning,
Circadian Rhythms
and the Broad Structure
Charles M. Weber
INFORMS Meeting – San Diego, CA, USA
October 11, 2009
10/11/2009
Charles Weber -- INFORMS 2009
1
Abstract
• The theory of punctuated equilibrium associates
radical change with the disruption of an
organization's deep structure.
• An empirical study of semiconductor photomask
manufacturing
• suggests that radical improvement in
organizational performance
• is contingent upon synchronizing circadian
rhythms
• across a stable broad structure of organizations
• within and outside the firm.
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Charles Weber -- INFORMS
Slide 2
Acknowledgements
• The research that underlies this paper was
funded in part by National Science Foundation
Grant #0822062 (Enabling Timely Revolutions
in Organizational Performance).
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Charles Weber -- INFORMS
Slide 3
Outline of Paper
– Timely Revolutions in Organizational Performance
– Research Questions
• Circadian Rhythms in the Value Network
• Pacing Revolutions in Organizational Performance
– Empirical Study of Photomask Manufacturing Industry
• Research Methods
– Preliminary Findings
• Leading-edge chipmakers entrain value networks.
• “Broad Structure” of revolutions in performance
– Implications: Circadian Ecosystems?
– Further Research
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Charles Weber -- INFORMS
Slide 4
The High Tech Manufacturing Lifecycle
• Urgent economic environment (Gersick, 1988)
• Product output rate is performance metric (Terwiesch & Bohn, 2001)
• Timely revolutions in organizational performance!
Performance
(Product Output Rate)
•
•
•
•
Market window open
Capacity Constraint (Bohn & Terwiesch, 1999)
Time-to-Volume Pressure (Terwiesch & Bohn, 2001)
Radical improvement in organizational performance
• Market
window
closed
• Negligible
output
• Market constraint
• Output saturation
time
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Charles Weber -- INFORMS 2009
Slide 5
Punctuated Equilibrium: The Classical View
(Prigogine & Stengers, 1984; Gersick 1991)
Performance
(Product Output Rate)
Revolution
• Deep structure becomes unglued
• Radical, frame-breaking change (Tushman et al., 1986)
Stasis, momentum
• Deep structure
of subsystems
• Incremental
change
Stasis, momentum
• New deep structure
• Incremental change
time
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Slide 6
Radical Learning Without Radical Change!
(Weber, 1996-2009)
1.2
Process
Quality
Learning
(CI)
Normalized Scale
1
Production Quality
Learning (CI)
TL(t)
/ Tmax
TL(t/t
VP)/TLmax
qN(t/t--VPeq.
) (1)
q/qVP
(1)
YL(t)
-- eq.)(4a)
Y (t/t
(4a)
YF(t)
-- eq.(4c)
YF(t/t
VP)
(4c)
YP(t) -- eq. (6)
(6)
L
0.8
0.6
VP
YP(t/tVP)
0.4
Q(t)
-- eq. )/Q
(7)
Q(t/t
VP
Delayed
Impact
Production
Volume
Learning
(non-CI)
0.2
tPR/tVP
Venture
Inception
10/11/2009
0.2
0.4
0.6
PR t /t
PD
PD VP
0.8
tCS/tVP
Product
Release
1
CS t /t
VP VP
Optimal
Output
Charles Weber -- INFORMS
(7)
Surge in
Organizational
Performance
0
0
max
1.2
t/tVP
VP 
• Subsystem
Learning!
Slide 7
No Strokes of Organizational Genius!
(Weber, 1996-2009)
• Radical improvement in organizational
performance occurs without radical
organizational change.
– The deep structure stays intact!
– Radical change (of leadership, structure, processes
and practices) always disables revolutions in
organizational performance.
• Managers coordinate subsystem-level learning
activities to deliver timely revolutions in
organizational performance.
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Charles Weber -- INFORMS
Slide 8
Research Questions
• Are timely revolutions in organizational
performance just about subsystem learning?
• What about external factors?
– Munificence? (e.g., Tushman & Anderson, 1986)
– Value networks? (Christensen & Rosenblum, 1995)
• How are timely revolutions paced?
– Event-based pacing? (Gersick, 1994)
– Temporal pacing? (Brown & Eisenhardt, 1997)
– Circadian Rhythms? (Ancona and Chong, 1996)
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Slide 9
Circadian Rhythms
(Ancona & Chong, 1996)
• Commonly observed in nature
– One component of system sets the pace for the rest
of the system.
• E.g., the heart sets the pace for the whole human body.
– External ‘zeitgebers’ from the environment entrain
the human body.
• E.g., 24-hour diurnal cycle determines sleep patterns and
body temperature.
• Circadian rhythms in organizations
– Subsystems and organizations are entrained by other
subsystems, organizations and the environment.
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Charles Weber -- INFORMS
Slide 10
Innovating Like Clockwork:
The CMOS Process Technology Supply Chain
CMOS Process Supply Chain
http://www.itrs.net
2nd
Order
Suppliers
1st
Order
Suppliers
ChipMakers
Lenses, components, materials, software, chemicals
are developed on the Moore’s Law schedule.
Lithography and process tools, photomasks, wafers, photochemicals are developed on the Moore’s Law schedule.
65 nm
45 nm
32 nm
22 nm
16 nm
Comp. μA CMOS process architecture follows Moore’s Law
“Sandy
Value
CY
2005 2006
2009 2010 2011 2012
2013 2014
CoreTM2007 2008
“Nehalem”
“Haswell”
Bridge”
Chain
present
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Slide 11
Pacing Revolutions in
Organizational Performance
Performance
(Product Output Rate)
• Do the circadian rhythms of suppliers determine the timing
and durations of timely revolutions by manufacturers?
• Do timely revolutions by manufacturers force their tool
suppliers to undergo timely revolutions as well?
• How about the suppliers of subsystems that go into the tools?
Tool Supplier
Tool
Subsystem
Supplier
Manufacturer
time
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Slide 12
Empirical Study of Photomask Manufacturing
– Ideal industry to study timing in high tech industries.
– Photomasks are within semiconductor value network.
• Photomask generations align with semiconductor process
generations.
– Photomasks contain the patterns that are printed onto
microchips.
• They must be ready and available before chips are printed.
• They are very difficult and expensive to make.
– They must be written onto quartz
– This requires sophisticated e-beam writing tools and inspection
tools.
• Tools and quartz plates must be ready for manufacturing
before photomasks can be produced in volume.
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Slide 13
Research Methods
– Initial survey determines needs and practices of
photomask manufacturers. (Berglund, Weber, Gabella, 2009)
– Case study research (Eisenhardt, 1989; Yin, 1994)
• 8 cases; 25 case interviews to date.
• Semiconductor process generation constitutes case.
– Composite sequence analysis (Miles & Huberman, 1985)
• Determines sequence of events that is required to enable
timely revolutions in organizational performance
– Lots of Secondary sources including …
• SIA International Technology Roadmap for Semiconductors
• http://en.wikipedia.org/wiki/Intel_Tick-Tock
• http://www.intel.com/technology/tick-tock/index.htm
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Slide 14
Preliminary Findings
– Leading-edge chipmakers entrain mask makers (as they
do tool makers).
• Most leading-edge chipmakers have internal mask shops for
leading-edge masks. (Williamson, 1985)
– Tool makers and mask makers entrain followers among
chipmakers.
• Followers among chipmakers do not have internal mask
shops have for leading-edge masks.
• Mask makers (and tool makers) enable timely revolutions in
chipmakers when masks and tools become available
– “Broad Structure” in the semiconductor value network
• enhances mutual munificence of participants.
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Slide 15
Pacing in the Photomask Value Network
3
Entrained Timely
Revolution
Process
Research
Spike
2.5
Zeitgeber:
Leading-edge
chipmaker
Pilot
Development
Spike
2
1.5
chips/qtr*(10^-7)
1
masks/qtr*(10^-2)
big ticket items/qtr.
0.5
sets of subsys./qtr.
0
0
2
4
6
Time in Years
8
10
• Mask tool subsystems ready for mask tool
• Mask tool ready for mask making
• Masks ready for chip production
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Charles Weber -- INFORMS
Slide 16
The Broad Structure of Photomask Manufacturing
Within Same Company
Mask Tool
orMask
Material
Tool
Maker
or
Material
Mask
Tool
Maker
or
Material
Mask
Tool
Maker
or
Material
Maker
Mask Shop for
Leading-edge
Masks
Leading -edge
Semiconductor
Manufacturer
Mask Shop for
General Purpose
Masks
Following
Semiconductor
Manufacturer
supplies
•
•
•
•
•
entrains
Mask tool makers also make semiconductor tools.
The photomask market is not very large (~$3B/year).
Mask tool/material makers respond to large, leading-edge chipmakers.
Followers are indirectly entrained by leaders.
Performance surge delayed -- competitive advantage for leaders.
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Charles Weber -- INFORMS
Slide 17
Ticks and Tocks at Intel
http://en.wikipedia.org/wiki/Intel_Tick-Tock
http://www.intel.com/technology/tick-tock/index.htm
Moore’s Law
CMOS
Process
Architecture
?
65 nm
Computer
MicroArchitecture
CY
3D device
45 nm
CoreTM
32 nm
“Nehalem”
22 nm
“Sandy
Bridge”
16 nm
“Haswell”
?
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
present
“old” process;
new product
Product Shrink
Platform Extension
Meyer Utterback (1997)
?? Radical Innovation?
10/11/2009
CMOS
Architectural Innovation
Henderson Clark (1990)
Product Platform Renewal
Meyer Utterback (1997)
Charles Weber -- INFORMS 2009
Slide 18
Circadian Ecosystems
Supplier
Innovation
CMOS
Process
Architecture
65 nm
Computer
MicroArchitecture
CoreTM
Complementor
Innovation
(Gawer, Cusumano)
CY
45 nm
32 nm
“Nehalem”
22 nm
“Sandy
Bridge”
16 nm
“Haswell”
MS
Vista
2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
present
Moore’s Law
• Is Intel the keystone of an ecosystem? (Iansiti, Levien, 2004)
• Does Intel’s tick-tock clock set the pace for a significant portion
of the global economy?
Charles Weber -- INFORMS
10/11/2009
Slide 19
2009
Further Research
• Coming up next year:
– Qualitative analysis
– of sequences of events
– that enable timely revolutions
– in organizational performance
– within the semiconductor value network.
• Anticipated Theoretical Contribution
– Advance towards a theory of organizational
learning for value networks.
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Slide 20
List of References
•
•
•
•
•
•
•
•
•
•
Ancona, D., and Chong, C.-L. 1996. Entrainment: Pace cycle, and rhythm in organizational
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Berglund, C. N., Weber, C. M., and Gabella, P. 2009. Benchmarking the productivity of
photomask manufacturers. IEEE Transactions on Semiconductor Manufacturing (in press).
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Bohn, R. E., and Terwiesch, C. 1999. The economics of yield-driven processes. Journal of
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Gersick, C. J. G. 1991. Revolutionary Change Theories: A multilevel Exploration of the
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Gersick, C. J. G. 1994. Pacing strategic change: The case of a new venture. Academy of
Management Journal 37(1), 9-45.
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Slide 21
List of References (continued)
•
•
•
•
•
•
•
•
•
Henderson, R. and Clark, K. 1990. Architectural Innovation: The Reconfiguration of Existing
Product Technologies and the Failure of Established Firms. Administrative Science Quarterly,
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Iansiti, M. and Levien, R. 2004. Strategy as ecology. Harvard Business Review (March), 68-78.
Meyer, M. , Tertzakian, P. and Utterback, J. 1997. Metrics for managing research and
development in the context of the product family. Management Science 43(1), 88-111.
Miles, M. B., and Huberman, A. M. 1984. Qualitative data analysis. Sage, Beverly Hills, CA.
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ramp-up. International Journal of Production Economics 70(1), 1-19.
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Tushman, M. L., Newman, W. H. and Romanelli, E. 1986. Convergence and upheaval:
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Williamson, O. 1985. The Economic Institutions of Capitalism, New York: Free Press, chapters
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